Dubai businesses upbeat on new export markets, major projects

New export markets and projects being launched ahead of Expo 2020 Dubai are energising economic activity in Dubai, particularly in the trading and construction sectors and businesses are confident of improved outcomes in the months ahead.

The quarterly survey of the Dubai Economy shows Composite Business Confidence Index, BCI, in the emirate improving by 2.2 points to reach 114.9 in the second quarter of 2019, compared to 112.7 points in the same period of 2018, with respondents anticipating higher volumes and profits.

The survey also showed that 83 per cent of the businesses in Dubai rated their situation as “good” or “stable” in Q2 of 2018, while the others had to deal with a few obstacles, such as weak demand during the Ramadan season and increasing competition. The proportion of businesses foreseeing an improvement in the business situation has slightly increased from 45 per cent in Q3 of 2018 to 46 per cent in Q3 of 2019, while 43 per cent expect stability to prevail.

Large companies continue to maintain stronger projections as compared to SMEs with Composite BCI scores of 118.3 and 109.9 points for Q3 of 2019, respectively. As Dubai successfully promotes itself as a competitive source market, 22 per cent of the firms look to exporting to new markets during Q3 of 2019. The leading new markets for export diversification are Africa and Europe.

Commenting on the latest BCI scores, Khalid Al Kassim, Assistant Director-General for Economic Affairs at the Dubai Economy, said businesses in the emirate are being innovative and seizing opportunities in spite of a challenging global economic landscape. “Businesses in Dubai have been able to remain competitive and aim for the next level as a series of measures adopted by the government continue to enhance the ease of business and create new economic opportunities.” A comparison of expectations among key economic sectors reveals that the trading sector holds the strongest outlook for sales revenue, volumes sold, profits, hiring and new purchase orders as compared to the manufacturing and services sectors for Q3 of 2019. Overall, 50 per cent of businesses are looking forward to their revenues improving in Q3 of 2019, chiefly on higher volumes, while 33 per cent estimated stable revenues.

For the upcoming quarter, while 79 per cent of respondents intend to maintain their selling prices at the current level, 10 per cent plan to increase prices.

The trading sector is most confident about its prospects on sales volumes, selling prices, revenue, profits, hiring and new purchase orders as compared to the manufacturing and services sectors.

Within services, the construction segment is the most optimistic about volumes for Q3 of 2019, while in the trading sector, the auto (spare parts) segment is most optimistic about volumes during Q3 of 2019.

In the coming 12 months, 30 per cent of the firms intend to expand their current headquarters. Manufacturing firms are most optimistic about capacity expansion plans as compared to the services and trading firms.

Meanwhile, Dubai FDI, the investment development agency of the Department of Economic Development (DED) in Dubai, held an interactive seminar along with several strategic meetings with senior executives in Houston, Texas. The seminar in Houston saw the participation of leading entities from Dubai such as Dubai Exports, DP World/ JAFZA, DMCC, US-UAE Business Council, Jumeirah Group, Emirates Group, the US Consulate General in Dubai, the UAE Embassy Washington, and the UAE Consulate General in US.

The investment mission to Houston is part of the global promotional investment program,  which aims to exchange and explore potential investment partnerships within key sectors such as innovation in space and economic growth, and the promotion of Dubai as a preferred global investment destination known for its ease of doing business and investment-friendly policies in line with the emirate’s consistent strategy to diversify the economy.

The mission to the United States, which lasts until September 14, strives to enhance the relationships with one of the world’s leading economic powers and highlighting Dubai’s investment opportunities as a preferred global destination for foreign direct investment and doing business.

Fahad Al Gergawi, CEO of Dubai FDI: “The mission is an important step for Dubai to explore new fields of partnership with Houston, where the seminar witnessed massive participation from our strategic partners at Dubai’s advantages seminar, where we highlighted the emirate’s competitive advantages and encouraging potential as a preferred investment destination for US companies seeking to expand in the UAE and the region. I highly appreciate the continued support and work of the delegation participating in the program of international promotional missions of the Dubai Government to promote the Emirate’s leadership as a highly preferred investment destination for international investors. We look forward to sustainable partnerships with our partners in Houston and the USA.”

The seminar was held at Seyfrath Shaw LLP and discussed Dubai’s key pillars of innovation with investors, including one-on-one breakout meetings to highlight  business opportunities in sectors such as aerospace, agriculture and food security, automotive, building products and construction services, education, healthcare and life sciences, hospitality, information technology and smart services and technology and logistics. The seminar was followed by a meeting at the Mayor’s office in Houston where the team considered areas of common interest that could deliver benefits for both parties.

WAM/ Agencies